AFFORDABLE HOMES
SHARED OWNERSHIP: BREAKING DOWN THE COSTS Over 200,000 households in the UK currently own a shared ownership home.
With a 10% deposit of just £8,313, estimated upfront costs are £10,813, factoring in typical fees and moving costs of £2,500. By comparison, average monthly rent for a one bedroom in Hounslow is £1,300 per month, while purchasing the same property on the open market would require a 10% deposit amount of £33,250, contributing to a monthly cost of £1,787 based on a 5.0% mortgage interest rate.
associated with shared ownership are often cheaper than renting in some postcodes. At Lampton Parkside, estimated monthly costs on a typical one bedroom apartment are £1,154, based on purchasing a 25% share of a one bedroom home. This includes £571 rent on the unowned share, £402 for the mortgage (based on a 5.0% interest rate), and service charge of £181 (based on an example rate of £4 per square foot).
The scheme is quickly becoming one of the only viable routes to homeownership for many first time buyers, especially in London. With shared ownership, buyers purchase a share of the property and pay subsidised rent on the remaining value. A much smaller deposit is required than when buying on the open market, and with rents in the capital also rising at record pace, the monthly costs
For NHG Homes, which understands the journey to homeownership can feel overwhelming, transparency around costs is key. Digital tools available on NHG Homes’ website include a monthly cost calculator, giving buyers the knowledge to decide which route to homeownership is most suitable for them. At the purchase stage, all fees are clearly set out in the lease, including itemised charges and estimates, how much rent you will pay on your unowned share, and caps on how much your rent can be increased by over time.
Srekanth took out a mortgage on a 25% share of a two bedroom apartment at Lampton Parkside in February 2023. The property was on the market for £430,000, so a 25% share equated to £107,500. Srekanth bought with a deposit of £25,000 and his monthly costs are £1,303. Of that, £414 goes on his mortgage and £739 on rent for the part he doesn’t own, plus a £150 service charge.
Visit nhghomes.com/shared-ownership to find out more
*Service charge included below is an example rate only.
First Time Buyer August/September 2024 47
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